tag:blogger.com,1999:blog-7997981344777920857.post4349487119495712007..comments2015-08-01T04:22:28.994-07:00Comments on Not the Treasury view...: The Austerity Delusion?Jonathan Porteshttp://www.blogger.com/profile/11900237767195255134noreply@blogger.comBlogger26125tag:blogger.com,1999:blog-7997981344777920857.post-9456167779481660952013-05-04T00:06:01.430-07:002013-05-04T00:06:01.430-07:00I find many useful things herewithmoving companies...I find many useful things herewith<a href="http://www.fastaffordablemoving.com/" rel="nofollow">moving companies california</a>jimmi korbethttp://www.blogger.com/profile/07899019813707888645noreply@blogger.comtag:blogger.com,1999:blog-7997981344777920857.post-64017042634161930002013-04-27T07:41:37.979-07:002013-04-27T07:41:37.979-07:00It’s arduous to seek out knowledgeable people on t...It’s arduous to seek out knowledgeable people on this matter, but you sound like you already know what you’re talking about! Thanks<br /><a href="http://www.fastaffordablemoving.com/" rel="nofollow">moving services California</a>jimmi korbethttp://www.blogger.com/profile/07899019813707888645noreply@blogger.comtag:blogger.com,1999:blog-7997981344777920857.post-61121186786098272012013-02-19T03:39:49.240-08:002013-02-19T03:39:49.240-08:00The 1930s Swedish public spending binge did indeed...The 1930s Swedish public spending binge did indeed follow a private sector recovery and stifled it. Governments always claim that it was their measures that caused a recovery, even when it caused the opposite. <br /><br />Scandinavian GDP fell in the mid 1930s along with their spending binge but it is difficult to find public spending data for this period. Do you know of any links?Johnhttp://www.blogger.com/profile/07442010719863995872noreply@blogger.comtag:blogger.com,1999:blog-7997981344777920857.post-88582615196114214012013-02-03T20:40:35.002-08:002013-02-03T20:40:35.002-08:00Yes. And they pick any contradictory non sequitur ...Yes. And they pick any contradictory non sequitur or fact free arguments they can find,to blame all problems on the state. These tendentious people are annoying.Keithhttp://www.blogger.com/profile/00769952853595228563noreply@blogger.comtag:blogger.com,1999:blog-7997981344777920857.post-44904131349394165262013-02-02T14:29:50.353-08:002013-02-02T14:29:50.353-08:00&quot;The facts are quite simple.&quot;
Simple fa...&quot;The facts are quite simple.&quot;<br /><br />Simple facts for simple minds?<br />Postkeyhttp://www.blogger.com/profile/11747509012748106827noreply@blogger.comtag:blogger.com,1999:blog-7997981344777920857.post-31520775503902239602013-02-02T14:21:34.630-08:002013-02-02T14:21:34.630-08:00Distinguish between discretionary and induced {cyc...Distinguish between discretionary and induced {cyclical} expenditures.<br /><br />The government have chosen to cut capital expenditure. {Discretionary expenditure}.<br /><br />See June Budget 2010 P45 <br /><br />This, of course, has adverse effects on GDP, leading to falling tax revenues and increases in induced {cyclical} expenditures.**<br /><br /><br />This would lead to current public spending rising in cash and real terms?<br /><br />According to S.Keen:<br /><br />In the USA, in the &#39;Great Depression&#39; aggregate demand fell and GDP declined by 28%. <br /> In the USA, in the &#39;Great Recession&#39;, aggregate demand fell by a greater amount than it had in the &#39;Great Depression&#39; but GDP declined by &#39;only&#39; 5%.<br />http://www.scribd.com/doc/116293469/Keen-2012-Fiscal-Cliff-Lessons-From-1930-s<br /><br />The initial increase in discretionary expenditures {plus induced expenditures} prevented, in this case, the U.S. economy falling by more than 28%. <br /><br />**{The government were expecting the Barro/Ricardo equivalence proposition to generate extra aggregate demand? The new &#39;Voodoo Economics&#39;?}<br /> Postkeyhttp://www.blogger.com/profile/11747509012748106827noreply@blogger.comtag:blogger.com,1999:blog-7997981344777920857.post-67972807945358215952013-02-02T04:03:55.475-08:002013-02-02T04:03:55.475-08:00That does explain why the Scandinavian nations wer...That does explain why the Scandinavian nations were plunged permanently into poverty in the mid 1930s. Good point.Andrew Boadahttp://www.blogger.com/profile/10720220626530577485noreply@blogger.comtag:blogger.com,1999:blog-7997981344777920857.post-86686608384674771232013-02-02T03:53:12.645-08:002013-02-02T03:53:12.645-08:00It doesn&#39;t take long for the austerity crowd t...It doesn&#39;t take long for the austerity crowd to reveal that their austerity policies aren&#39;t rooted in sound macroeconomics (they aren&#39;t) but in their social values and theory of state. They don&#39;t like the welfare state and they see scaremongering over the deficit and the debt as their opportunity to pare it down. Andrew Boadahttp://www.blogger.com/profile/10720220626530577485noreply@blogger.comtag:blogger.com,1999:blog-7997981344777920857.post-81409167573696808382013-01-31T14:07:40.570-08:002013-01-31T14:07:40.570-08:00You might also want to clarify:
&quot;whether or n...You might also want to clarify:<br />&quot;whether or not cuts contribute to growth&quot;<br />Is there actually a real possibility that the cuts implemented have had no impact on our economic growth?? (Bear in mind we are over 4.5 years below the pre-crisis GDP peak, with the real possibility of entering a triple-dip recession, and various studies have shown the negative economic impact of austerity).<br /><br />&quot;we are still living way beyond our means&quot;. <br />Who is exactly?<br /><br />&quot;If you cut day to day department spending those departments must learn to live within their means, it happens all the time in business...&quot;<br />Realise that contrary to much of current doctrine and practice, private sector business practices are often completely inappropriate for the public sector, given the very nature and purpose of public sector functions. Cuts and &#39;learning to live within their means&#39; for a hospital translates into less life-saving drugs and equipment, fewer beds, doctors and nurses. People&#39;s dignity and lives are at stake, unless of course one has private medical cover, eh Mr Cameron, Mr Osborne?. (Though cuts to bureaucracy and numbers of managers should be carefully looked into, as they seem to almost outnumber doctors and nurses!).<br /><br />&quot;small cut in the size of the economy...further down the line it will always lead to financial stability&quot;. Does it? Any studies with data and evidence to show this? <br />And I made the mistake of thinking that a too lightly regulated banking sector, unresticted global capital flows, the euromarket and the whole offshore system enabling and promoting capital flight and thus constraining government policy destabilised the financial and economic system a little more than a large public sector does.<br /><br />Whilst I&#39;m sure that there are valid cuts which can and should be made in certain areas, is there really no limit to the range of reasons/excuses put forward, no matter how ridiculous (as this one is) in the ultimate pursuit of the tory ideological goal of small government?<br /> <br />&quot;why did the UK economy go into decline before the banking crises?&quot; You might want to check the ONS quarterly GDP data on this one, but it was not in decline - it was rising for a full year until Q4 2007, only declining in Q2 2008!<br /> Simonhttp://www.blogger.com/profile/01453060744510427275noreply@blogger.comtag:blogger.com,1999:blog-7997981344777920857.post-80991640621928765102013-01-31T08:56:08.841-08:002013-01-31T08:56:08.841-08:00Your comment is full of unsubstantiated assertions...Your comment is full of unsubstantiated assertions stated as if they were self evident truths<br /><br />For example<br /><br />Structural deficit? The UK government has run one for decades never mind &quot;towards the later part of the boom.&quot; (ref HMT or IFS)<br /><br />&quot;Stealth tax and regulate everyone to death&quot; Tax as a proportion of GDP wasn&#39;t high under the Labour Government...I think on average it was lower than under Margaret Thatcher (Ref HMT or IFS). And of course, the UK labour market is one of the least regulated in the world – third in the OECD area (ref OECD index of labour market strictness). <br /><br />mammyslittlesoldierhttp://mammyslittlesoldier.wordpress.com/noreply@blogger.comtag:blogger.com,1999:blog-7997981344777920857.post-7907365801518081182013-01-29T09:32:26.653-08:002013-01-29T09:32:26.653-08:00For anyone who wants to see his powers of predicti...For anyone who wants to see his powers of prediction, from the above article (august 2010):<br />&quot;Mr Lilico said: &#39;Given the constraints of late 2008 and the absurdities of subsequent fiscal, finance and regulatory policy, if we can get away with a recession of only 6.6%, deflation of only 2% and [subsequent] inflation of only 10% for one year, [Bank of England governor] Mervyn King will deserve a medal.&#39;<br /><br />The radical economist also predicted Britain would endure a brief &#39;double-dip&#39; recession early next year, followed by a boom in the economy. But he added that this boom would quickly run out of control.<br /><br />Reflecting on the past 30 months, whilst anyone can be forgiven for not getting future prediction spot on target, the hubble telescope is needed to see how far wide of the mark Andrew Lilico&#39;s analysis and predictions are.<br /><br />Simonhttp://www.blogger.com/profile/08684429495148368233noreply@blogger.comtag:blogger.com,1999:blog-7997981344777920857.post-40647290057402659632013-01-29T08:25:05.009-08:002013-01-29T08:25:05.009-08:00The left will never admit that the public sector b...The left will never admit that the public sector became far too bloated to be sustainable by the Taxpayer which had to fund hence having a massive structural deficit towards the latter part of a boom (I don&#39;t think Keynes would have approved of that Mr Brown).<br /><br />The facts are quite simple. Put aside the complexities you talk about or whether you are left or right or whether or not cuts contribute to growth it is patently obvious that we are still living way beyond our means. If you cut capital spending unless you are replacing or automating a function the taxpayer incurs costs later on so using that argument is short term.<br /><br />If you cut day to day department spending those departments must learn to live within their means, it happens all the time in business, public servants often don&#39;t have these skills (I&#39;ve seen it first hand) so by definition if it leads to a small cut in the size of the economy (and there are varying shades of opinion on this) further down the line it will always lead to financial stability.<br /><br />If your theory that borrowing and splurging (making out the likes of Redwood etc were evil) was right then why did the UK economy go into decline before the banking crises? If you stealth tax and regulate everyone to death then all you do is scare business away. <br /><br />You are also forgetting that if they don&#39;t stop printing money to fund this borrowing we are heading for big inflationary trouble which will impact us all - by this definition the cuts and EU red tape have been nowhere near what they need to be.daviesp856http://www.blogger.com/profile/11249383822865405326noreply@blogger.comtag:blogger.com,1999:blog-7997981344777920857.post-67802841965148778892013-01-29T08:13:32.789-08:002013-01-29T08:13:32.789-08:00It is a misnomer to actually call Lilico&#39;s blo...It is a misnomer to actually call Lilico&#39;s blog yesterday a &#39;response&#39;. Rather as it is a mass of misdirection, misinterpretation and as LL (above) states &quot;a masterpiece in pedantic semantics obscuring the core content of the discussion&quot;, in which his own opinions,definitions and obscurely constructed interpretations disprove and supposedly trump many of the arguments in Portes&#39; original article. <br />He begins by raising the question of bias on the part of the NIESR. Take a quick look at the title of his webpage (Conservativehome)! I&#39;m sure he thinks he has written an unbiased &#39;response&#39;.<br />On the question of the deficit reduction plan, his argument becomes laughable, where he firstly cites Portes &quot;He claims the causality runs the other way - deficit reduction stalled and therefore the government abandoned its deficit reduction targets. But there&#39;s no economic causality there.The government wasn&#39;t obliged to abandon its deficit reduction targets because of stalling deficit reduction by anything other than politics. With full policy freedom, the government could have cut spending faster, to keep to its targets. Deficit reduction is stalling because the government has stopped trying to cut the deficit.&quot;<br />So the government&#39;s own policies have nothing to do with the missed deficit targets? Self-defeating austerity policies as highlighted by numerous other economic bodies and studies have not reduced tax receipts and caused various forms of G, including transfer payments to rise? It has simply been through policy choice alone to abandon the deficit reduction plan? The target could have been kept if the government had cut spending faster? So a greater dose of poison would fix the patient then.<br />I&#39;ll leave the rest to Jonathan and perhaps others, as its simply not worth spending any more time on this.<br /><br /><br /><br /><br /> <br />Simonhttp://www.blogger.com/profile/08684429495148368233noreply@blogger.comtag:blogger.com,1999:blog-7997981344777920857.post-78476143564885316212013-01-29T07:22:14.170-08:002013-01-29T07:22:14.170-08:00Andrew Lilico has indeed responded- googled to fin...Andrew Lilico has indeed responded- googled to find out who he was and this gem came up:<br />http://www.thisismoney.co.uk/money/news/article-1702363/Interest-rates-may-reach-8-by-2012.html<br /><br />10% inflation by 2012... ray564khttp://www.blogger.com/profile/12536743746973283959noreply@blogger.comtag:blogger.com,1999:blog-7997981344777920857.post-89542920577083834532013-01-29T06:56:29.400-08:002013-01-29T06:56:29.400-08:00But governments do not trade, Lefty, the public se...But governments do not trade, Lefty, the public sector are not drivers, they are passengers. It seems that it is the increase of growth of public expenditure that is the key variable. If you look at the historical data a steady growth of public expenditure is beneficial to total GDP and does not have an excessive adverse effect on private sector. Where governments go wrong is that they rapidly escalate public sector growth. This results in a continuous diversion of private sector capacity to servicing the government rather than to servicing other parts of the private sector. Basically, once you are in a recession accelerating public spending damps the private sector - just look at how the New Deal suppressed private sector growth rate in the US. See <a href="http://pol-check.blogspot.co.uk/2013/01/sydenhams-law-of-public-expenditure-and.html" rel="nofollow">Sydenjam&#39;s Law of public expenditure and GDP</a>.Johnhttp://www.blogger.com/profile/07442010719863995872noreply@blogger.comtag:blogger.com,1999:blog-7997981344777920857.post-4079085448895748672013-01-29T06:01:47.400-08:002013-01-29T06:01:47.400-08:00The &quot;Definition of Austerity&quot; debate has...The &quot;Definition of Austerity&quot; debate has predictably and rapidly descended into angels-on-pinheads territory. Lilico&#39;s blog yesterday was a masterpiece in pedantic semantics obscuring the core content of the discussion.<br /><br />It really doesn&#39;t matter whether the current fiscal position equates to &quot;Austerity&quot; or &quot;Stimulus&quot; by one person&#39;s idiosyncratic definition. What matters is what the effect of the fiscal position is.<br /><br />But the Consolidators have a very persuasive and simple argument in claiming that the fact that our current high deficit AND lack of growth &quot;proves&quot; that fiscal stimulus does not work. It seems to me that those who veer more to the Keynesian outlook require an equally simple and persuasive argument.<br /><br />How about the following metaphor.<br /><br />You are driving a car and the road starts to go uphill. You respond by pushing the accelerator harder. The car more or less maintains speed but you now start to worry about your fuel consumption. So you ease off the pedal a little and the car stalls. But when the car stalled, you were still pushing the pedal harder than you would have done on a level road. Do you conclude that pushing the pedal harder than normal cannot get you up a hill?<br /><br />That, in a nutshell, appears to be the Redwood/Lilico approach.Lefty Lamptonhttp://www.blogger.com/profile/00942080109459810222noreply@blogger.comtag:blogger.com,1999:blog-7997981344777920857.post-55445438853657331162013-01-29T04:56:21.945-08:002013-01-29T04:56:21.945-08:00Well, when Osborne made his emergency budget in Ju...Well, when Osborne made his emergency budget in June 2010 the oil price was $60-65. Within 9 months it had almost doubled to over $120.<br /><br />That&#39;s the sort of thing that really screws up your household consumption forecasts,Shinseihttp://www.blogger.com/profile/09237888519217740228noreply@blogger.comtag:blogger.com,1999:blog-7997981344777920857.post-9986025713677996552013-01-29T03:57:43.148-08:002013-01-29T03:57:43.148-08:00“But any credible analysis suggests that pretendin...“But any credible analysis suggests that pretending that there has not in fact been a sharp fiscal consolidation in the UK, with predictably adverse consequences, is equally mistaken. “<br /><br />There obviously has been fiscal consolidation in the UK since 2010. How much effect this has had on growth and job creation is the real debate. The other factors mentioned, (Euro austerity, Oil etc) probably had significantly more impact on growth than fiscal consolidation in my view.<br /><br />The “predictably adverse consequences” you mention is where I would disagree the most. The level of employment and jobless claims are far more important to the majority of the population than the notoriously inaccurate (in the near term) and revised statistical composite that it is GDP.<br /><br />Judging the economy on the GDP alone would seem to be rather unwise. The consistent record of large revisions to data from previous recessions and the issues the ONS has experienced since 2008 will probably make the data even less reliable than normal.<br />matthew859http://matthew859.wordpress.com/noreply@blogger.comtag:blogger.com,1999:blog-7997981344777920857.post-79183736903885863802013-01-29T02:52:33.027-08:002013-01-29T02:52:33.027-08:00If government stimuli can indeed rescue an economy...If government stimuli can indeed rescue an economy then there should be a record somewhere in the data of increasing public spending increasing private sector growth. Does public spending ever increase private sector growth? If Keynes was right then there must be a record somewhere in the UK and US data of a public spending binge that stimulated industry.<br /><br />If you look at the actual data, it is surprising, see: <a href="http://pol-check.blogspot.co.uk/2013/01/sydenhams-law-of-public-expenditure-and.html" rel="nofollow">Sydenhams Law of public expenditure and GDP growth</a><br /><br />Whether the public spending is for wars, economic intervention or welfare the answer is NO, furthermore the New Deal seems to have been a myth, there was a strong private sector recovery in the USA before the New Deal.Johnhttp://www.blogger.com/profile/07442010719863995872noreply@blogger.comtag:blogger.com,1999:blog-7997981344777920857.post-34415270715620528052013-01-28T15:51:50.823-08:002013-01-28T15:51:50.823-08:00Andrew Lilico from Europe Economics has responded:...Andrew Lilico from Europe Economics has responded:<br /><br />http://conservativehome.blogs.com/platform/2013/01/andrew-lilico-what-jonathan-portes-gets-wrong-and-why.htmlRicardo's Ghosthttp://www.blogger.com/profile/10570395129957821807noreply@blogger.comtag:blogger.com,1999:blog-7997981344777920857.post-41591975248194659302013-01-28T13:46:51.758-08:002013-01-28T13:46:51.758-08:00I&#39;m glad you asked me that..
Let me take this...I&#39;m glad you asked me that..<br /><br />Let me take this opportunity to recommend one of my favourite data sources, table 2.33 (&quot;Historical series of fiscal aggregates&quot;) from the &quot;EFO Supplementary Fiscal Tables&quot; produced by the OBR: <br /><br />http://budgetresponsibility.independent.gov.uk/pubs/Copy-of-December-2012-EFO-fiscal-supplementary-tables4.xlsJonathan Porteshttp://www.blogger.com/profile/11900237767195255134noreply@blogger.comtag:blogger.com,1999:blog-7997981344777920857.post-26745968231826106142013-01-28T10:14:59.762-08:002013-01-28T10:14:59.762-08:00&quot;According to the OBR, between 2009-10 and 20...&quot;According to the OBR, between 2009-10 and 2011-12 taxes went up by more than 1 percent of GDP, while public investment fell by 1.7 percent of GDP.&quot;<br /><br />Hi Jonathan - do you have a link to this?Richardhttp://www.blogger.com/profile/05080228104653656499noreply@blogger.comtag:blogger.com,1999:blog-7997981344777920857.post-81080050570794191662013-01-28T07:22:04.882-08:002013-01-28T07:22:04.882-08:00Triple dip here we comeTriple dip here we comeUnknownhttp://www.blogger.com/profile/08229880658386917340noreply@blogger.comtag:blogger.com,1999:blog-7997981344777920857.post-20943705742920314812013-01-28T03:48:23.022-08:002013-01-28T03:48:23.022-08:00In one of your previous blogs, I cannot remember w...In one of your previous blogs, I cannot remember which, you had a chart showing the decline in real government purchases. I thought that was a terrific demonstration of how austerity has happened, since the decline in purchases has been offset by increased safety-net expenditures if one looks at the overall view.Adityahttp://www.blogger.com/profile/09705142532738266928noreply@blogger.comtag:blogger.com,1999:blog-7997981344777920857.post-23640293080685904452013-01-28T02:24:16.416-08:002013-01-28T02:24:16.416-08:00Right off your main thrust, so possibly OT, but wh...Right off your main thrust, so possibly OT, but what commodity prices, over what period, what effect, are you referring to in last para? Just in brief.<br /><br />It startled me as I wasn&#39;t aware, depending on your starting point(s) over the volatile late noughties of course, that commodities had been contractionary.<br /><br />Roddyhttp://www.blogger.com/profile/14104358721079710535noreply@blogger.com